How Will Tight Copper Market Affect Data Center Growth?

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Written by Paul Wiseman for IIR News Intelligence (Sugar Land Texas)

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Summary

While moves are underway to improve copper mining and smelting, data centers require increasing amounts of the metal. A strained copper supply chain could hinder data center growth.

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Copper & Data Centers

Data centers are notable for hogging power for operating and water for cooling. Under the surface are large amounts of metals--and a looming copper shortage could add to data center growth challenges.

Copper supply challenges have been looming for a while. Three years ago, in February 2023, CNBC headlines proclaimed a copper shortage that would last through 2030. Now that looks optimistic. More recently, in October 2025, the International Copper Study Group said it sees the global refined copper market with a 150,000 metric-ton deficit in 2026.

Sam Hosack Managing director of Prospect Resources has warned, "The copper supply gap is no longer just a forecast--it is becoming a fundamental constraint on global computing capacity. When you scale these requirements against the global surge in AI [artificial intelligence] and digital infrastructure, it becomes clear: we are heading toward a significant bottleneck in computing capacity."

Industrial Info's Vice President of Energy Market Solutions Shane Mullins listed how much copper a data center needs, and how that has increased in recent years. "A single 1-gigawatt (GW) AI data center can require up to 50,000 tons of copper for power distribution, grounding and cooling systems," said Mullins.

But wait, there's more: "While older facilities used 5,000 to 15,000 tons of copper, AI-ready campuses require roughly three to four times that amount due to higher power loads and advanced liquid cooling, which requires copper heat exchangers."

Cost vs. Supply

As the supply chain is stretched, costs rise even if supply is available. Mullins broke that down, noting that copper is less than half of one percent of a data center's cost. Data centers' share of copper demand in 2030 is expected to be about 1%, a significant jump from 2024's 0.15%.

Big data center expansion plans could create issues, he warned. "The real question is the massive $600+ billion data center capital outlay plans for 2026. If supply-chain leads for transformers and high-voltage cabling (which rely on copper) stretch from two years to four years, we could see delays in a lot of this planned spending," said Mullins.

The bottom line for data centers? "Physical copper exists, but it's at a price and timeline that won't disrupt these projects is in serious doubt."

Help on the Way

Much as natural gas is stored in the summer to prepare for winter demand, Mullins says stockpiling copper now could mitigate future shortages.

He said, "On February 2, 2026, the administration announced Project Vault, a landmark initiative led by the Export-Import Bank (EXIM)." It establishes the U.S. Strategic Critical Minerals Reserve (SCMR) which EXIM says is "backed by a $10 billion EXIM loan and nearly $2 billion in private-sector investment."

The SCMR, an independently governed public-private partnership, will store essential raw materials including copper in secure facilities in the U.S.

Its purpose is "To act as a buffer against supply shocks, ensuring that critical industrial sectors--like data center hyperscalers and the defense industry--have access to materials if global markets tighten further," Mullins explained.

On another front, in October 2025 the Trump Administration exempted domestic copper smelters from stricter emissions standards for two years "to ensure the two remaining U. S. smelters stay operating and can scale production without heavy compliance costs," said Mullins. This reversed a May 2024 ruling from the U.S. Environmental Protection Agency.

Domestic & Global Mining Situations

The Trump administration has issued several executive orders (EOs) for mining, most notably EO 14154 and EO 14241, to relieve "permitting bottlenecks" for domestic projects, Mullins said.

Two particular mines are involved, he noted. One is the Resolution Copper project in Arizona: This is prioritized as a "transparency project" to expedite land transfers and permitting. If completed, it could supply roughly 25% of U.S. copper demand. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the related project reports.

The other is the Pebble mine in Alaska: Renewed efforts are underway to fast-track this site, which has been tied up in legal and environmental battles for years.

On the world scale, BHP and Lundin are looking at the Vicuna copper project in South America. Read more in February 17, 2026, article - BHP, Lundin May Spend $18.1 Billion on Argentina-Chile Copper Project. While a final investment decision (FID) is not due until yearend 2026, it could be a world-class resource capable of producing more than 500,000 metric tons of copper per year.

Argentina in particular is a haven for copper mining investment, with several projects including Vicuna, which could revolutionize the nation's mining industry.

Chilean mining company Codelco saw a year-over-year production rise in 2025. This came despite a July disaster at its El Teniente mine, in which a rock-burst killed six mine workers. As a result, the mine's August production declined by 25%, with output not expected to recover until 2030.

Peru also recorded higher year on year copper production in 2025, but Chile's production dropped.

Will it be Enough?

While the mines and rules discussed above may help, experts like Mullins and others still see the copper supply chain being strained for the foreseeable future.

By the Numbers

• $600+ billion: Data center expansion plans for 2026
• $10 billion: U.S. Project Vault loan to create secure domestic storage for critical minerals to mitigate supply chain issues
• 150,000 metric tonnes: 2026 copper supply deficit predicted by some experts

Key Takeaways

• Data center growth is not only challenged by grid issues, the supply chain of critical metals like copper also is struggling to keep up with demand.
• The U.S. is taking some steps toward increased copper production, and new mines are on the drawing boards in South America, but it will be years before many of those come online.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).